Debunking fascism of intellectual property – Part 2 (Economical argument)

In my previous post, I have explained about how ethically intellectual property is something not right. It imposes restriction for your customers how to use his already bought products and charges even more fee (royalty) for distribution as if he never really owns his products although he already bought it.

However, there is an argument that is usually stated by intellectual property proponents that although it is evil to use state to enforce IP, it is necessary evil. By IP, innovators can be more stimulated to produce more innovation since he will be secured his right to his own invention and hence, there will be more people creating innovation and that will compensate for customer inconvenience for not able to distribute IP-goodie freely. In short, IP is needed to stimulate more economic growth caused by inventions.

At first glance, that argument makes sense. However, as a study in multiple industrial sectors has shown, that is not the case. Take a look at software industry. During its inception, all following inventions were made before 80’s period without copyright protection: all the graphical user interfaces and widgets such as buttons and icons, the compilers, assemblers, linked lists, object-oriented programming, databases, search algorithms, font displays, word processing and computer languages.

Furthermore, if IP is as important as its proponents have asserted, there will be no lively open-source software community in software industry. Open-source software made their source code available for modification and even reselling. And as we see, open source software can withstand competition with its proprietary counterpart and in some cases they controlled even more market share.

Consider the case of operating system. Other than proprietary OS (Windows and Mac), we have 3 most popular open-source operating system: Solaris, Linux and FreeBSD. It is estimated in server market, Linux operating system has a 25 percent market share. Even in desktop environment, Linux is estimated to be passing Mac in popularity.

Open source also dominates the Internet. Netcraft regularly surveys web sites to see what web server program they are using. In December 2004, they polled all of the 58,194,386 websites it could find on the Internet an found that the open-source Web server Apache had 68.43 % of the market share, IIS Microsoft had 20.86 % and Sun had only 3.14%.

So such example from software industry illustrates that innovation will still happen without patent and copyright. Even more than that, there are negative economic consequences for patent and copyright enforcement. Among negative consequences are:

  • Loss of efficiency due to the fact that copyright enforcement creates monopoly which creates artificial scarcity to garner a higher price. Basically, customers are forced to pay higher price with no additional or tangible benefits to the product because of monopoly.
  • Use of inefficient and costly method of production to ensure customers cannot distribute their products easily. For example: implementation of DRM software to propietary MP3 music which reduces quality and even in some cases create loophole for malware in customer PC. Like this case.
  • Copyright and patent distort political system by favoring big corporations which held many patents, employed many high-class lawyers to be able to sue all small indigenous businesses. It sucks wealth from society to big corporations and create imbalance markets.

Furthermore, patent enforcement is very costly and its enforcement does not create more innovation. Such costs for enforcement, paid to various police departments and patent lawyers, are non-productive costs. It does not create new wealth nor adding new value to existing wealth. It is parasitic in nature because it sucks society wealth and will actually cripple economic growth in the long run.

Also, we can see from market that patent enforcement in software industry is far from creating more innovation as its proponents argued. In fact, it creates very big software company with mediocre product (Microsoft) compared to its open-source counterpart. It is not tools used to create innovation because patent by nature is granted monopoly. Monopoly does not encourage innovation because it blocks competitors to produce similar things with some modifications and hence better quality.

I hope right now more of you will be convinced that patent is not something morale nor it is economically beneficial. In fact, patent is just a tool that is used to serve interest of big corporations to produce oligopoly or monopolistic market. That’s why I called it ‘fascism’ since it is a merge between corporate and government power to curb freedom from ordinary citizens.

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About edwin2026

I am currently Indonesian expatriate working in Singapore, graduated from Nanyang Technological University with major in Computer Science in 2009. I am also working as software engineer, developing and maintaining systems for Singapore civil service. I write this blog to share to readers about my life principle on various aspects, like religion, politics, business, relationship, and technology. I am interested in alternative worldviews because I found that many things taught to us by establishments are not true and harmful. My dream is to become self-sufficient in food and energy. Hopefully, someday I can have my own fruit garden and my own power plant and able to sell my electricity to power company. I hope readers enjoy my blog.
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